On Monday, Asia-Pacific markets showed mixed results as investors reacted to new 30% tariffs imposed by US President Donald Trump on the European Union and Mexico over the weekend.
Hong Kong’s Hang Seng Index increased by 0.26% while South Korea’s Kospi index gained 0.83%.
Japan’s Nikkei 225 benchmark fell by 0.28%. In contrast, the broader Topix index remained almost unchanged.
Additionally, Japanese government bond yields also moved higher. On Monday, the yield on the 10-year government bond increased by 5.5 basis points to reach 1.554% at 11.20 a.m. local time. Earlier in the day, it hit its highest level since May 22. When bond prices rise, yields fall.
The yield on 30-year Japanese government bonds increased by 6.5 basis points to 3.111%. Meanwhile, the yield for 20-year bonds rose slightly to 2.56%.
With this background in mind, let’s take a look at the 13 best Japanese stocks to buy according to hedge funds.
An array of Japan exchange listed fund symbols on a large trading screen.
Our Methodology
To compile our list of the 13 best Japanese stocks to buy according to hedge funds, we used stock screeners from Finviz and Yahoo Finance to find the largest Japanese companies. We also reviewed various financial media reports and online resources to compile a list of the best Japanese stocks to buy. Next, we focused on the top 13 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q1 2025 database of 1,000 elite hedge funds. Finally, the 13 best Japanese stocks to buy were ranked in ascending order based on the number of hedge funds holding stakes in them as of Q1 2025.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
13 Best Japanese Stocks to Buy According to Hedge Funds
13. BloomZ Inc. (NASDAQ:BLMZ)
Number of Hedge Fund Holders: 1
BloomZ Inc. (NASDAQ:BLMZ) is one of the best Japanese stocks to buy according to hedge funds. On May 22, BloomZ Inc. (NASDAQ:BLMZ) announced a business partnership with M-NEXT Holdings Co., Ltd., the parent company of O&A Co., Ltd., which operates the popular trading card specialty shop “Ryusei no Arashi” in Japan.
Through this partnership, M-NEXT and BloomZ Inc. (NASDAQ:BLMZ) will work together to create new and fun entertainment experiences for customers. The companies will combine BloomZ Inc.’s (NASDAQ:BLMZ) capabilities in planning and production through its VTuber and sound production business with M-NEXT’s retail store operations capabilities.
BloomZ Inc. (NASDAQ:BLMZ) plans to use its VTubers and voice actors to help design in-store event spaces. These spaces will be developed like open-concept radio studios where live, interactive events can be hosted. M-NEXT will also benefit as these events are designed to strengthen fan engagement and bring more traffic to the “Ryusei no Arashi” stores.
Both companies believe that this partnership will drive growth and generate new business opportunities for them.
BloomZ Inc. (NASDAQ:BLMZ) is a holding company that operates BloomZ in Japan, which specializes in sound production for games and anime. BloomZ also manages, trains, and promotes voice actors and VTubers.
12. Tokyo Lifestyle Co., Ltd. (NASDAQ:TKLF)
Number of Hedge Fund Holders: 1
Tokyo Lifestyle Co., Ltd. (NASDAQ:TKLF) is one of the best Japanese stocks to buy according to hedge funds. On June 26, Tokyo Lifestyle Co., Ltd. (NASDAQ:TKLF) reported that it has incorporated a new subsidiary in Australia. The company announced plans to open a directly operated store under its own “Tokyo Lifestyle” brand in Sydney in November 2025.
This is a strategic move by Tokyo Lifestyle Co., Ltd. (NASDAQ:TKLF) as it focuses on expanding its international footprint and strengthening its sales network in the Oceania region.
The new store will be run by TOKYO LIFESTYLE PTY LTD, which is a new Australian subsidiary that is 51% owned by TOKYO LIFESTYLE LIMITED, a wholly-owned Hong Kong subsidiary of Tokyo Lifestyle Co., Ltd. (NASDAQ:TKLF). The Store will be located at Dixon Street, Haymarket, Sydney. This area is at the heart of Sydney’s Chinatown, a busy and well-known place that attracts many tourists and locals.
By opening the store in such a location, Tokyo Lifestyle Co., Ltd. (NASDAQ:TKLF) expects to make its brand more visible in the region and to accelerate its market penetration in Australia.
Tokyo Lifestyle Co., Ltd. (NASDAQ:TKLF) is a Japanese company that is engaged in the retail and wholesale of Japanese beauty and health products, sundry products, luxury products, electronic products, collectible cards, trending products, and other products in Hong Kong, Japan, North America, Thailand, and the United Kingdom.
11. Lead Real Estate Co., Ltd (NASDAQ:LRE)
Number of Hedge Fund Holders: 1
Lead Real Estate Co., Ltd. (NASDAQ:LRE) is one of the best Japanese stocks to buy according to hedge funds. On July 10, Lead Real Estate Co., Ltd. (NASDAQ:LRE) announced the opening of its long-stay hotel “ENT TERRACE ASAKUSABASHI.”
The hotel is located in Asakusabashi, Tokyo, and is only a short 3-minute walk from Asakusabashi Station. The area is quiet and retains the traditional feel of Tokyo’s downtown. There are historical buildings and local shopping streets nearby. According to the report by Lead Real Estate Co., Ltd. (NASDAQ:LRE), guests can easily explore popular sightseeing spots like Asakusa, Ueno, Ryogoku, and Akihabara by walking or riding a bike.
The ENT TERRACE series is themed around “Family Vacation.” It offers apartment-style hotels with kitchens, making them ideal for a medium or long-term stay by international travelers, families, and groups. The ENT TERRACE ASAKUSABASHI is the fourth hotel by Lead Real Estate Co., Ltd. (NASDAQ:LRE) in the ENT TERRACE series in Tokyo.
Lead Real Estate Co., Ltd. (NASDAQ:LRE) is a Japanese company that develops luxury residential properties, including single-family homes and condominiums in Tokyo, Kanagawa prefecture, and Sapporo. The company also operates hotels in Tokyo and leases apartment units in Japan and Dallas, Texas.
10. HeartCore Enterprises, Inc. (NASDAQ:HTCR)
Number of Hedge Fund Holders: 3
HeartCore Enterprises, Inc. (NASDAQ:HTCR) is one of the best Japanese stocks to buy according to hedge funds. On July 2, HeartCore Enterprises, Inc. (NASDAQ:HTCR) announced that it has signed a consulting agreement with Cipher Core Co., Ltd.
This is the company’s 16th win for its Go IPO consulting service that helps Japanese-based companies go public in the US.
As part of the agreement, HeartCore Enterprises, Inc. (NASDAQ:HTCR) will be paid a total of $500,000 in fees by Cipher Core. Additionally, the company will receive a warrant that allows it to buy 3% of Cipher Core’s capital stock, on a fully diluted basis. If the consulting agreement extends beyond the initial 12-month term, HeartCore Enterprises, Inc. (NASDAQ:HTCR) will also be paid by the hour for any extra consulting work.
This is the second Go IPO contract that HeartCore Enterprises, Inc. (NASDAQ:HTCR) has secured this year. This shows that Japanese growth companies are still pursuing a US listing, even though the IPO market is currently challenging.
The company is also in discussions with several other companies in the Asia-Pacific region. Many of these companies are considering when and how to list on US stock markets. HeartCore Enterprises, Inc. (NASDAQ:HTCR) believes that the work it is doing now will lead to more deals in the long term.
HeartCore Enterprises, Inc. (NASDAQ:HTCR) is a Japanese enterprise software and IPO consulting services company that offers its solutions to enterprise customers in Japan and around the world.
9. ORIX Corporation (NYSE:IX)
Number of Hedge Fund Holders: 5
ORIX Corporation (NYSE:IX) is one of the best Japanese stocks to buy according to hedge funds. On July 4, ORIX Corporation (NYSE:IX) announced that its US group company, ORIX Corporation USA (OCU), has entered into an agreement to acquire about 71.4% ownership of Hilco Global.
This strategic move will help OCU develop asset-based loan origination capabilities and grow its asset management business. ORIX Corporation (NYSE:IX) noted that the US market for asset-based loan origination has grown from $400 billion in 2018 to $550 billion in 2025. The corporation expects that the market will continue growing at a mid-single-digit rate annually.
OCU aims to capitalize on this market growth by strengthening its asset-based loan origination capacities and growing its asset-based loan contracts by using third-party assets. This will also improve its overall asset management business.
According to the report by ORIX Corporation (NYSE:IX), the acquisition is expected to be completed by the end of September 2025.
ORIX Corporation (NYSE:IX) is a Japanese diversified financial services group that is active globally in financing and investment, life insurance, banking, asset management, real estate, concession, environment and energy, and automobile-related services.
8. Nomura Holdings, Inc. (NYSE:NMR)
Number of Hedge Fund Holders: 11
Nomura Holdings, Inc. (NYSE:NMR) is one of the best Japanese stocks to buy according to hedge funds. On June 25, Nomura Holdings, Inc. (NYSE:NMR) reported that the group’s core company within the Investment Management Division, Nomura Asset Management Co., Ltd., has launched a new exchange-traded fund (ETF).
In its report, Nomura Holdings, Inc. (NYSE:NMR) explained that this ETF, named “NEXT FUNDS Bloomberg US Treasury Bond (7-10 year) Index (75% Yen-Hedged) Exchange Traded Fund” is now listed on the Tokyo Stock Exchange (TSE), and investors can trade it through securities dealers and traders in Japan.
The ETF is designed to follow the Bloomberg US Treasury 7-10 Year Index TTM JPY Currency 75% Hedged. It tracks the performance of US Treasury bonds with maturities between seven and ten years.
The index is based on Japanese yen (JPY) and uses a 75% currency hedge to allow investors to invest in US Treasury bonds while also reducing some risks that come with currency fluctuations.
Nomura Holdings, Inc. (NYSE:NMR) is a Japanese financial services holding company that specializes in wealth management, investment management, banking, and global research.
7. Honda Motor Co., Ltd. (NYSE:HMC)
Number of Hedge Fund Holders: 11
Honda Motor Co., Ltd. (NYSE:HMC) is one of the best Japanese stocks to buy according to hedge funds. On June 26, Honda Motor Co., Ltd. (NYSE:HMC) reported that it has opened a new software development operation called Honda Software Studio Osaka.
This studio is located in the Grand Green Osaka, a multifunctional commercial complex in the Umeda area in Osaka, Japan.
Honda Motor Co., Ltd. (NYSE:HMC) is focusing on using intelligent technologies to improve its products, especially electrified vehicles. Previously, the company announced plans to invest about JPY 2 trillion in software-related research and development over 10 years through the fiscal year ending March 31, 2031.
To support this goal, Honda Motor Co., Ltd. (NYSE:HMC) is looking to hire skilled software talent and improve its work environment and development capabilities.
The company has been growing its network of software development operations. Starting with Osaka in October 2023, Honda Motor Co., Ltd. (NYSE:HMC) has expanded to Omiya, Shinagawa, Nagoya, and Fukuoka. The new Honda Software Studio Osaka began operations in April 2025. Looking ahead, the company plans to open another software development operation in Tokyo in early 2026.
Honda Motor Co., Ltd. (NYSE:HMC), or simply Honda, is a Japanese multinational automotive manufacturer. The company’s main products are automobiles, motorcycles, and power products.
6. Mizuho Financial Group, Inc. (NYSE:MFG)
Number of Hedge Fund Holders: 11
Mizuho Financial Group, Inc. (NYSE:MFG) is one of the best Japanese stocks to buy according to hedge funds. On May 20, Mizuho Financial Group, Inc. (NYSE:MFG) announced a new partnership with Mercer Japan Limited and Mercer Investments (Japan) Limited.
This strategic collaboration has been formed to offer Outsourced Chief Investment Officer (OCIO) services in Japan.
Through this partnership, Mizuho Financial Group, Inc. (NYSE:MFG) will provide OCIO services to major clients in Japan, including pension funds and educational institutions. These services will be delivered through Asset Management One Co., Ltd., which is an asset management subsidiary of Mizuho Financial Group, Inc. (NYSE:MFG).
This partnership will allow Mizuho Financial Group, Inc. (NYSE:MFG) to further improve its offerings and offer comprehensive and innovative solutions to asset owners. These solutions will include advanced and optimized asset management across asset classes, improved risk management, and reliable reporting and oversight. The collaboration also aims to address challenges like a shortage of specialized talent.
Mizuho Financial Group, Inc. (NYSE:MFG) is a Japanese multinational bank holding company that offers comprehensive financial and strategic services, including banking, securities, trust and asset management, credit card, private banking, and venture capital.
5. Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG)
Number of Hedge Fund Holders: 11
Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) is one of the best Japanese stocks to buy according to hedge funds. On May 19, Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) and its consolidated subsidiary, MUFG Bank, announced a new partnership with Sakana AI, a company that specializes in AI research and development.
Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) has also appointed Ren Ito, the Chief Operating Officer of Sakana AI, as the group’s AI Advisor.
Sakana AI and MUFG Bank will form a long-term strategic partnership for a period of more than 3 years. Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) plans to use Sakana AI’s innovative technologies to solve management challenges and add more value to operations. Initially, the corporation will use the expertise of Sakana AI’s “The AI Scientist” to automate the creation of documents.
Ren Ito will play an active role by advising Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) on AI-related activities. He will help shape the corporation’s AI strategy while also supporting networking and providing important information to the management team.
In its current business plan, which began in April 2024, Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) committed to improving its AI capabilities and data infrastructure to improve productivity and better serve customers. This partnership is part of the group’s aim to strengthen its AI strategy.
Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) is one of the largest banking institutions in Japan and a leading global financial services group. It offers a wide range of services, including commercial banking, trust banking, securities, credit cards, consumer finance, asset management, and leasing.
4. Sumitomo Mitsui Financial Group, Inc. (NYSE:SMFG)
Number of Hedge Fund Holders: 12
Sumitomo Mitsui Financial Group, Inc. (NYSE:SMFG) is one of the best Japanese stocks to buy according to hedge funds. On July 8, Sumitomo Mitsui Financial Group, Inc. (NYSE:SMFG) announced the appointment of Mr. Ahmed Jamil Mazhari to lead transformation efforts aimed at speeding up the company’s AI strategy and integration across the group.
In partnership with Mr. Mazhari, Sumitomo Mitsui Financial Group, Inc. (NYSE:SMFG) also plans to create a new company in Singapore focused on agentic AI solutions. This new company will first serve the group as “customer zero” before offering its services to other clients and expanding to the broader market.
To support its digital transformation, Sumitomo Mitsui Financial Group, Inc. (NYSE:SMFG) has committed an initial IT investment of JPY 800 billion. Out of this, JPY 50 billion has been specifically set aside for generative AI efforts until the next medium-term management plan.
Sumitomo Mitsui Financial Group, Inc. (NYSE:SMFG) is a Japanese financial services group and holding company.
3. Toyota Motor Corporation (NYSE:TM)
Number of Hedge Fund Holders: 15
Toyota Motor Corporation (NYSE:TM) is one of the best Japanese stocks to buy according to hedge funds. On July 2, Toyota Motor Corporation (NYSE:TM) announced that it has started building new amenities worth over $50 million at its Arizona Proving Grounds. These new facilities will be used for vehicle and automotive technology testing and development.
The new construction will bring in many improvements, including a 5.5-mile oval track, an off-road park, and new surfaces for ride and handling tests. Most of the work is expected to be finished by the end of the year. Toyota Motor Corporation (NYSE:TM) is also planning to build a new facility focused on developing advanced driver assistance technology.
The site, known as the Arizona Mobility Test Center at Toyota Arizona Proving Grounds, has been open for use by various companies as a vehicle testing resource since 2021.
Site updates will make it even more attractive for testing new vehicle features. Toyota Motor Corporation (NYSE:TM) also plans to use the site to develop its North American vehicle models.
Toyota Motor Corporation (NYSE:TM) is a Japanese multinational car manufacturer.
2. Takeda Pharmaceutical Company Limited (NYSE:TAK)
Number of Hedge Fund Holders: 20
Takeda Pharmaceutical Company Limited (NYSE:TAK) is one of the best Japanese stocks to buy according to hedge funds. On June 30, Takeda Pharmaceutical Company Limited (NYSE:TAK) announced that it has received US Food and Drug Administration (FDA) approval for AMMAGARD LIQUID ERC with less than or equal to 2 micrograms per milliliter in a 10% solution.
AMMAGARD LIQUID ERC is the only ready-to-use liquid immunoglobulin (IG) therapy with low immunoglobulin A (IgA) content that is approved for use as a replacement therapy for people aged two years and older who have primary immunodeficiency (PI).
As a ready-to-use liquid, GAMMAGARD LIQUID ERC can be administered intravenously or subcutaneously. This can help make treatment easier for patients and healthcare providers by removing the need for reconstitution.
Takeda Pharmaceutical Company Limited (NYSE:TAK) expects the commercialization of GAMMAGARD LIQUID ERC to start in the US in 2026. The company expects to launch it in the European Union in 2027, where it has already been approved by the European Medicines Agency (EMA) as DEQSIGA.
Takeda Pharmaceutical Company Limited (NYSE:TAK) is a Japanese multinational biopharmaceutical company that discovers and develops a range of treatments. The company’s core therapeutic and business areas include gastrointestinal and inflammation, rare diseases, plasma-derived therapies, oncology, neuroscience, and vaccines.
1. Sony Group Corporation (NYSE:SONY)
Number of Hedge Fund Holders: 23
Sony Group Corporation (NYSE:SONY) is one of the best Japanese stocks to buy according to hedge funds. On May 29, Reuters reported that Sony Group Corporation’s (NYSE:SONY) CEO, Hiroki Totoki, said that spinning off the group’s financial services arm will allow that business to raise its own funds.
He also pointed out that even after the spin-off, the financial group will keep using the Sony brand and continue working with Sony Group Corporation (NYSE:SONY).
The financial group includes banking and insurance. Sony Group Corporation (NYSE:SONY) plans to distribute just over 80% of its shares in the financial group to shareholders as dividends in kind.
This is the first time in over two decades that a Japanese company is doing a partial spin-off with a direct listing. The listing is planned for September 29.
The financial group intends to buy back shares worth about 100 billion yen by March 2027. Totoki noted that the financial services business will need to invest in its IT systems and make strategic investments, such as mergers and acquisitions, in the medium-to-long term.
In recent years, Sony Group Corporation (NYSE:SONY) has sold off some of its hardware operations to focus more on entertainment, which includes the company’s PlayStation games business. Last year, over 60% of Sony Group Corporation’s (NYSE:SONY) profits came from its entertainment business.
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